Pep Boys Implements Profit Enhancement Plan
30 October 2000
Pep Boys Implements Profit Enhancement Plan
Business EditorsPHILADELPHIA--Oct. 30, 2000--The Pep Boys - Manny, Moe & Jack , the nation's leading, full-service, automotive aftermarket chain, announced that it has implemented a comprehensive profit enhancement plan that will significantly reduce the Company's infrastructure and operating expenses.
This plan included the closure of 38 unprofitable stores and two distribution centers, resulting in the elimination of approximately 1,200 positions. The plan also included a reduction in the number of field and distribution center supervisors as well as the consolidation of the store support centers, which resulted in the elimination of approximately 300 other positions.
In addition, the Company modified the management structure within its stores and rationalized its hours of operation to better correspond with customer demand on a store specific basis. The estimated, annualized pre-tax benefit of these initiatives is approximately $70 million.
The Company's third quarter results for the thirteen weeks ended October 28, 2000, which will be reported on November 10, will include an estimated $60 million pre-tax charge to earnings to reflect the required write-down of assets relating to the store closures, severance and other related costs as well as costs associated with the recently completed refinancing of its credit facilities.
In addition to the expected improvement in earnings resulting from the profit enhancement plan, the Company expects to generate approximately $50 million in estimated proceeds from the sale of the retired assets.
Pep Boys currently operates 627 stores and 6,486 service bays in 36 states and Puerto Rico.
Note: Certain statements made herein, including those discussing management's expectations for future periods, are forward-looking and involve risks and uncertainties.
The Company's actual results may differ materially from the results discussed in the forward-looking statements due to factors beyond the control of the Company, including the strength of the national and regional economies and retail and commercial consumers' ability to spend, the health of the various sectors of the market that the Company serves, the weather in geographical regions with a high concentration of the Company's stores, competitive pricing, location and number of competitors' stores and product and labor costs.
Further factors that might cause such a difference include, but are not limited to, the factors described in the Company's filings with the Securities and Exchange Commission.
In accordance with the SEC's recently adopted Regulation FD (fair disclosure), investors will now have an opportunity to listen to the Company's quarterly conference calls discussing its results and related matters. The calls will be broadcast live over the Internet at Broadcast Networks' Vcall web site, located at http://www.vcall.com.
The call for the third quarter will be broadcast live on Friday, November 10th at 9:00 AM EST. To listen to the call live, please go to the web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.